ATLANTIC CITY, N.J. (Reuters) - Atlantic City, New Jersey’s cash-strapped gambling resort, voted on Wednesday to sell a defunct airstrip to its water utility for $110 million and present a five-year recovery plan ahead of schedule, in an effort to avoid a state takeover of the city.

Atlantic City, which has been struggling under rising debt after its casino industry and subsequently its property tax base shrank drastically, has been trying to find new ways to raise funds and trim costs.

The much-needed cash from the airstrip's sale helps plug the hole in the city’s accounts and meet its debt payments, city councillors said.

"This is giving us a chance to save ourselves," said council president Marty Small at the council meeting where the vote was held.

The sale of the airstrip, known as Bader Field, to the water authority attracted controversy because while it would help the city’s coffers, it would add more debt to the Municipal Utilities Authority.

Previous efforts by the council to pass any resolution about the future of the authority failed amid infighting and confusion over how the city could best prevent water-rate increases.

But the city council narrowly approved the sale by a 5-4 vote, going for the cash in a bid to move out from under complex terms set by the state when it issued a $73 million emergency loan for the municipality earlier this year.

Details of the city’s recovery plan will be announced on Monday, Mayor Don Guardian said ahead of the council meeting, adding that he will announce on Thursday how the city plans to reduce its debt costs.

Atlantic City has been working with lawyers to restructure some of its $240 million in debt , most of which it took on to pay back casinos that won property tax appeals.

Guardian, who has put everything from city property to office furniture, scrap metal and bicycles up for sale, believes ongoing staff buyouts and other cost-saving and revenue-increasing efforts will help appease the state, which had told the city to reduce the cost of its government.

Separately, Guardian said he submitted a revised 2016 budget to state authorities earlier this week, meeting another requirement of the emergency loan.